Falcon Arranges Sale of Crescent at Carlyle

DISPOSITION

Falcon Arranges Sale of Crescent at Carlyle

Crescent at Carlyle is a complex of two office buildings containing 369,000 square feet – 1940 Duke Street and 2000 Duke Street – that is situated at the entrance to the Carlyle development.

Located in Alexandria, Virginia, just outside of Washington, D.C., the Carlyle development is a master-planned mixed-use project that is the new home for the U.S. Patent and Trademark Office (PTO). 1940 Duke Street is leased to Oblon, Spivak, one of the premier patent and trademark law firms in the U.S. 2000 Duke Street is now leased to a number of high quality tenants, including Northrop and PTO.

Before the new PTO complex was built, Falcon recommended the purchase of 1940 Duke Street, the property that was then under construction for Oblon, Spivak. Subsequently, when Time-Life announced they were moving out of the adjacent building, 2000 Duke Street, we suggested the purchase of that building on an all-cash basis. Within 18 months of the purchase of the property, it had been fully re-leased to five major tenants, including the U.S. Government on behalf of PTO, Northrop, a major investment advisory firm and a law firm.

1940 Duke Street was purchased in January 2003 for $74.5 million. 2000 Duke Street was purchased in March 2004 for $47 million, a price that included reserves for re-leasing and renovating the property. After the re-leasing was completed in September 2005, a first mortgage was obtained from Eurohypo, virtually repaying the entire original investment for this property. The combined properties, renamed Crescent at Carlyle, were sold in June 2007 for $217 million, which produced an IRR for the two buildings of 27.9% over the four-year holding period.